All Topics / Finance / I’ve purchased off mkt with 10mth settlement – How can I get a higher val from bank in time for settlement

Viewing 9 posts - 1 through 9 (of 9 total)
  • Profile photo of GetafixGetafix
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    @getafix
    Join Date: 2013
    Post Count: 14
    December 19, 2013 - 6:32 am

    Hi everyone,

    I've purchased a block of land in Sep-13 with 10mth settlement and from what I'm hearing the market is improving. I've already paid the 10% deposit and would like to approach the bank for financing around Mar/Apr next year. I've also got a designer getting plans and permits done for townhouses but this may not be approved by the time I need to settle. I'd like to get a higher price for financing purposes than the purchase price as I bought the block off market and hopefully by march next year the market would have improved. Does anyone have any advice on how best to approach lenders and the best way to get a higher price when I'm borrowing for settlement?

    Profile photo of Jamie MooreJamie Moore
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    @jamie-m
    Join Date: 2010
    Post Count: 5,069
    December 19, 2013 - 7:19 am

    Hiya

    Lenders will go off whatever the lower amount is between the valuation and the purchase price.

    This exception is when the contract is older than 12 months – then we may be able to get them to consider the val over purchase price.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of GetafixGetafix
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    @getafix
    Join Date: 2013
    Post Count: 14
    December 19, 2013 - 8:36 am

    Thx Jamie…

    Profile photo of Ryan McLeanRyan McLean
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    @ryan-mclean
    Join Date: 2010
    Post Count: 547
    December 19, 2013 - 10:32 pm

    Some banks will revalue properties in under 12 months (from what I hear) but if you don't own the property yet then Jamie is right. They will take the lower valuation of the two…they like to play it safe.

    You will also need to source a construction loan if you will be building a property. Different from a tradition home loan so you will need to look into that.

    Ryan McLean | On Property
    http://onproperty.com.au
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    Profile photo of GetafixGetafix
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    @getafix
    Join Date: 2013
    Post Count: 14
    December 20, 2013 - 6:07 am

    Thanks Ryan…if I get the plans and permits approved before settlement then they will revalue right?

    I'm planning on living there for at least 6 months to get PPOR and then look to sell or if possible develop…need a bit of extra equity! :) 

    Profile photo of TerrywTerryw
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    @terryw
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    December 20, 2013 - 10:03 am

    Unlikely. Loan would be based on purchase price of land and % of fixed price contract to build.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
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    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of Arun BhutaArun Bhuta
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    @arun-bhuta
    Join Date: 2014
    Post Count: 41
    March 29, 2014 - 12:08 am

    Dear Getafix,

    I believe you are now ready for the loan.

    Some banks allow private valuers to do valuation.

    The valuation is usually lower to purchase price or market value. Or market value if purchased more then 12 months before.

     

    If you plan to construct. Get the 80% loan on as per your purchase price now.

    Live for 6 Months by then you will have all plans and fixed price contract ready.

    Go to bank for construction loan then.

    The loan will be based on lower of  (land value+ cost of construction) and expected value of property after construction based on property near by of similar nature.

    The loan will be only P & I during construction

    You need to show where you will live and able to pay rent and what is your income during construction to remain serviceable.

    I hope I was able to help.

    Profile photo of Richard TaylorRichard Taylor
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    @qlds007
    Join Date: 2003
    Post Count: 12,024
    March 29, 2014 - 10:55 am

    Sorry Arun which Banks allow "private non panel valuations".

    Also IO is available during Construction with most lenders.

    Cheers

    Yours in Finance

    Richard Taylor | Australia's leading private lender

    Profile photo of GetafixGetafix
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    @getafix
    Join Date: 2013
    Post Count: 14
    March 29, 2014 - 11:08 am

    Thanks guys for your comments. I am going for funding soon. Settlement has been pushed back to August now on vendors request which suits me fine.

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